AACO PULLS $9.6M PROFIT OUT OF THE BOX
13 May 2015, Written by Karen Rickert
AUSTRALIAN Agricultural Company Limited's (ASX:AAC) shift from a pastoral company to a fully integrated beef producer has pushed its full-year results back into the black.
AACo delivered net profit after tax of $9.6 million, compared to a $39.9 million loss in FY14.
The company has capitalised on a 42 per cent increase in boxed beef sales since announcing it would transform its supply chain in July last year.
Boxed beef sales jumped to $267.6 million and offset a decline in cattle sales from $120.5 million in the previous period to $70.5 million in FY15. Total revenue increased by 9.5 per cent to $346.8 million.
The company says the statutory EBITDA increase to $44.9 million is a more effective measure of performance following the transition. It say the operating EBITDA loss of $3.6 million in FY15 doesn't recognise the unrealised gains of mark-to-market movement.
AACo managing director Jason Strong says the company managed to deliver a strong result, despite making significant changes to its operations.
"Sales of boxed beef now account for 77 per cent of revenue, up from 59 per cent in the previous corresponding period," he says.
"In the last six months, this has included the first sales of boxed beef from our new Livingstone beef processing facility at Darwin.
"These sales are into global markets where our traceable supply chains, sustainable practices and unique Australian heritage can command premium prices."
The company added the Pell and Tortilla cattle properties in Darwin last year to support year-round cattle supply for processing and live export.
Boxed beef will continue to be a key area of focus to sustain growth in the future, offsetting fluctuations in short-term cattle pricing.
Strong says heading into FY16 the company will execute a marketing strategy to bolster its relationship with established customers.
"Building our brands is the next stage of transforming and growing our business," he says.
AACo has not declared a dividend.